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Ladies and gentlemen, welcome to the JCDecaux 2025 Full Year Results Presentation.

I will now hand over to Jean-Francois Decaux, Chairman of the Executive Board and Co-CEO. Sir, please go ahead.

Good morning, everyone, and welcome to our 2026 full year results conference call. The speakers on this call will be Jean-Charles Decaux, Co-CEO; David Bourg, Chief Financial, IT and Operations Officer; and myself; Remi Grisard, Head of Investor Relations, is also attending today's conference call.

On the front cover, we chose this picture of one of our large digital kiosks on Market Street in San Francisco with an AI-related campaign because this new client category generated last year 30% of all revenues in the San Francisco advertising market.

Moving now on to Slide 4. Overall, 2025 is a solid year with robust underlying growth and strong performance in our key financial indicators. First, revenue. Our organic revenue growth is up 1.8% and 3.2% if we exclude the impact of the Paris 2024 Olympic Games and UFI Europe. So despite a tougher comparable and a more challenging as well as an uncertain macroenvironment, our underlying top line continued to grow.

Second, digital. Our digital revenue grew by 10% organically and now represents 41.7% of total group revenue with programmatic up 17.3% and reaching 10.4% of digital revenue. This confirms that digital, and especially programmatic, remain a key driver of our growth and of the transformation of the group.

On the profitability slide, we demonstrate the strength and operating leverage of our business model. Our operating margin rate improved to 20.9%, up 150 basis points year-on-year. Recurring EBIT increased by 18.6% and our net results, excluding the APG|SGA capital gain in 2024, is up 22.8%.

Finally, and very importantly, we delivered record free cash flow of EUR 342.9 million, up 47.9%, but David will comment all of that later. Bottom line, we delivered our 2026 target 1 year ahead of plan.

On Slide #5, and focusing on Q4, we recorded an organic growth rate of 1.6% above our guidance and our expectations of around flat. Our advertising revenue recorded a plus 3.1% organic growth, reflecting an acceleration versus Q3 and a solid advertising momentum, especially compared to traditional media companies in Europe. Non-advertising revenue were affected by a high comparable base in 2024 linked to the contract of the Paris automatic public toilet network.

Digital accounted for close to 45% of revenue, a 1.9 point increase with programmatic Digital Out-of-Home up 14% and representing 11% of digital revenue.

Coming back to -- on Slide 6, coming back to our full year 2025 revenue performance. Reported growth at 0.8% was affected by negative foreign exchange impact, partially offset by acquisitions and other change in scope. Street Furniture maintained its strong momentum with plus 1.9% organic growth, even against a base that had benefited from sporting events in Europe last year. Transport continued its rebound, growing plus 3.3% organically, despite a mid-single-digit revenue decline in China. Outside of China, growth was much stronger, reaching 6.8% organically. Billboard decreased by 2.3% organically, mainly due to high comparable and further rationalization of our inventory in France.

On the next Slide #7, you can see that North America and the Rest of the World were key growth drivers as they grew high single-digit, while the rest of Europe grew low single-digit and U.K. and Asia Pacific decreased low single-digit. France decreased mid single-digit, impacted by its high comparable. Excluding the 2024 Paris Olympic Games, France grew by 1.8% on an organic basis. This shows the strength of our geographically diversified model.

On Slide #8, we are not only well diversified geographically, but also by activities. Street Furniture now constitutes 50.7% of total revenue, while Transport at 35.8% has not yet recovered its 2019 revenue share of more than 40%. Billboard remains our smallest segment, accounting for 13.4% of total revenue as we continue to focus on premium assets and on digitization wherever possible in this segment. France is our largest country, representing 16.7% of total revenue, while Europe makes up nearly 50%. The U.K. ranks as our second largest country. Our exposure to China continues to decrease to around 10% in 2025 versus 18% in 2029.

Turning to the Slide #9. Our client portfolio is well diversified with our top 10 clients contributing to less than 13% of revenue. We observed a healthy rotation among leading advertising categories. Fashion, Luxury and Personal Care, our largest category at 18% of sales, turned slightly negative at minus 5%. Meanwhile, the next 3 categories showed robust growth: Retail at plus 7%; Entertainment/Film at 11% plus; and Finance at 13%.

Next, Slide #10. Digital Out-of-Home remained the key growth driver as it grew by plus 10% organically in full year 2025. Digital revenue penetration rose by almost 3 percentage points year-on-year, reaching 41.7% in full year 2025 and almost 45% in Q4. Our digital revenue distribution continues to closely mirror our business mix, as demonstrated in the next slide.

Digital penetration, on Slide #11, increased across all 3 business segments. In Street Furniture, digital revenue climbed to 39.9% compared to 36.9% a year earlier. Digital revenue in Transport, our most digitized segment, grew from 44.1% to 46.4%. In Billboard, digital revenue reached 35.8% from 33.8% a year earlier.

Let's move on to Slide #12, with programmatic advertising, which saw by 19.2% in 2025, reaching [ EUR 100.5 million ] (sic) [ EUR 180.5 million ] or 10.9% of our digital revenue, up from 9% in the previous year. We consider that more than 50% of this revenue is purely incremental coming from new advertisers and targeted campaigns. Programmatic revenues remain primarily incremental, sourced from smaller advertisers or from targeted campaigns, such as this campaign for a new perfume in Berlin.

On Slide 13, we anticipate continued strong growth for programmatic revenue, as there is an important gap today between countries such as Germany, at 36.5% and the Netherlands at 28.6%, surpassing the group average at 10.9% and some major digital markets like the U.K. and the U.S., which have not yet fully embraced programmatic. We predict programmatic penetration will continue to rise in the medium-term to above 20%.

On the next Slide #14, which is pretty full, you will find our most important contract wins and renewals in 2025. Taking a few examples in Street Furniture, we secured contracts in Europe with Carmila Carrefour, Rennes freestanding units, Odense in Denmark, Barcelona Street Furniture in Spain. In Japan, the third advertising market worldwide, we strengthened our footprint with Fukuoka, Kawasaki, Nagano, Nara and Sapporo. In Australia, we renewed the important contract of Melbourne Yarra Trams, which was announced last week. In Transport, we renewed Northern Rail in the U.K., Brussels Airport and buses, Metro in Belgium, National Rail in Norway. In North America, we won Denver Airport in the U.S.A., the #10 airport in the world with 82 million passengers.

Finally, in Billboard, we strengthened our portfolio, both in Portugal and in Ireland. To address the frequent analyst question regarding contract losses, the 2 main examples are Citybus in Hong Kong and Danish Rail in Denmark.

Finally, before handing over to David Bourg, we have confirmed our excellent ESG performance. Our performance was recognized as best-in-class by extra financial rating agencies, including our placement on the CDP A list for the third year in a row and the silver medal status from EcoVadis. We have received as well again the best score, AAA, from MSCI and Sustainalytics rated as a low-risk company among the media. More broadly, I would like to emphasize that out-of-home media is among the least carbon-intensive media formats for advertisers.

I will now hand over to David for the presentation of our financial highlights of the year.

Thank you, Jean-Francois. On this first slide at Page 17, you can see our key financial metrics for 2025. On this picture, the message is clear. 2025 is a very solid year, as Jean-Francois already mentioned. On revenue of EUR 3.967 billion, up 0.8% on a reported basis, we delivered strong operating leverage across the P&L, a record level of free cash flow and a lower net debt, while we continue to invest and resumed our dividends. Bottom line, with an operating margin at EUR 831 million, 20.9% of the revenue and a free cash flow at EUR 342.9 million, we exceeded our 2026 target 1 year in advance.

Let's now look in more detail at each KPI on the following slides, starting first with the evolution of our operating margin on the next slide. As you can see on the left side, our operating margin increased by EUR 66.6 million from EUR 764.5 million to EUR 831.1 million, plus 8.7% year-on-year, while the revenue increased by 0.8%. And so as you see on the right, the margin rate improved by 150 basis points from 19.4% to 20.9%.

This strong performance mainly reflects lower rents and fees, in particular after the contract reset in Mainland China and a very tight control of other operating costs, which are almost flat. This means we captured almost all of the 1.7% growth in advertising revenue. You also see lower cost of goods sold linked to a 6.5% decline in non-advertising revenue, partly due to the end of the automatic toilet installation program in Paris.

As you can see again on the right-hand side, margin expansion is visible across all segments. Street Furniture is now above 27%, a level we hadn't reached since 2015. Billboard stands at 17.6% and Transport at 13.5% with the strongest improvement of 230 bps, mainly driven by China and a strong growth in the rest of the world.

On Slide 19, you have the EBIT bridge from operating margin of EUR 831.1 million. On the top of the table, we deduct net amortization and depreciation, which are slightly up and maintenance spare part almost up moderately. This brings us to recurring EBIT, in the middle of the table, at EUR 376.7 million, up EUR 59 million year-on-year, broadly in line with the increase in operating margin or -- plus 18.6% with the margin improving from 8.1% to 9.5%.

Below recurring EBIT, after adding positive nonrecurring items, lower than last year because of the APG|SGA gain in 2024 and a small impairment, EBIT reaches EUR 431 million, up plus 5.5%. So in summary, this slide clearly confirms that we are not only growing our EBIT, but also delivering solid operating leverage at EBIT level on a recurring basis.

On next slide, Page 20, you find the bridge in our net income group share. Two key numbers at the bottom of the table, reported net income at EUR 262.6 million, plus 1.4% versus 2024, but excluding the APG|SGA capital gain in 2024, net income group share is up plus 22.8% in 2025, globally in line with our recurring EBIT.

Between EBIT on the top of the slide and net income at the bottom, the main points are a better financial result as we no longer have the EUR 22.6 million one-off on the loan in China, and we benefit from lower IFRS 16 discount cost due to lower lease liability, partly offset by lower interest income after the bond repayment in October 2024. Higher tax charge as well, reflecting our improved results with an effective tax rate around 25.6% against 20.8% in 2024 which benefited from the nontaxable capital gain from APG|SGA. Adjusted from that, 2024 effective rate would be above 24%, so close to 2025 rate.

Moving now to cash generation. As you can see at the bottom of this slide, 2025 is a record year with a free cash flow of EUR 342.9 million, a positive variation of EUR 111 million, almost plus 50% versus 2024. The main drivers of this increase are in the middle of the table, higher operating cash flow from EUR 50 million, directly linked to the improvement in operating margin. Below the operating cash flow, a positive contribution from working capital of EUR 33 million, in particular from lower inventories, mainly thanks to inventory optimization. And finally, a disciplined CapEx allocation with net investment down to around 7.5% of revenue, while still keeping a strong focus on digital, which represents close to 40% of net CapEx.

It is to be noted that the impact of factoring on working capital variation is negative by EUR 5 million as we did a lower volume of factoring at year-end than in 2024. We did EUR 272 million versus EUR 277 million in 2024. And also to be noted, a strong free cash flow generation before working capital variation as it reached EUR 284 million. So in summary, this slide shows that our business generates strong operating cash flow, and we continue to be disciplined on CapEx and working capital.

On Slide 22, on the left bar chart, you see the evolution of the net debt, excluding IFRS 16. It goes down from EUR 756 million to EUR 587 million, a reduction of EUR 169 million, mainly thanks to record free cash flow, partly offset by dividends, bolt-on M&A and share buybacks. This gives us low leverage with a net debt around 0.7x our operating margin.

On the right side of the slide, you can appreciate a very solid financial profile, EUR 1.3 billion cash, EUR 825 million undrawn credit facility, EUR 1.9 billion gross debt, 3.1 year average maturity, 3.4% financial cost and 91% of our debt which is on a fixed rate basis.

Finally, on the last slide, we present our recommendation for 2025 dividend. Given our strong 2025 result, record free cash flow and a solid financial position, we will propose to the AGM to increase the dividend per share to EUR 0.65 per share from EUR 0.55 last year. This is an increase of plus 18.2%, globally in line with our underlying earnings growth. It represents a payout ratio of around 52% of net result group share and about 40% of our free cash flow.

As already indicated, our intention is to continue to gradually increase the dividend in the coming years, while maintaining a balanced cash allocation between CapEx to support organic growth, targeted bolt-on M&A and an attractive and sustainable shareholder return.

That's all from my side on the financial, and I now hand over to Jean-Charles for the outlook.

Thank you, David, and good morning to everyone. So OOH and DOOH is more than ever, as you have seen, a growth media driven by increasing urbanization and mobility, leading to rising audiences as well as by the premium nature our media on its digitization.

As shown on this Slide 25, GroupM, the world's largest media buyer, forecast DOOH to be growing at 7.2% over the next 5 years, and OOH as a whole is expected to grow by 5.5% CAGR. This robust growth trajectory clearly sets us apart from other traditional media, which are facing a structural decline.

This is part of our ambition to take OOH and DOOH to the next level based on 3 key pillars: first, a unified ad tech stack that enable us to manage our entire inventory consistently for advertisers and fully capture the growth of DOOH. Second, data powering campaigns allowing for more relevant targeting and activations, including through programmatic buying. And finally, artificial intelligence, which acts as a catalyst by continuously optimizing delivery, performance and creativity across our networks.

On Slide 27, you can see our digital footprint by major geographies. Key growth drivers remain Brazil, the U.S., Australia, the U.K. and Germany. While the group average is 42% digital, many countries are still below that level, which means strong future upside. Our largest country, France, is at the moment only at 9% digital penetration for reasons we all know. Retail development will help accelerate digital and any opening of cities like Paris to more digital will be a real boost for the whole sector.

On the next slide, programmatic, as you can imagine and see, gives us 3 major advantages. First, trigger-based buying. We can buy based on real-time contextual signals. Second, we can now measure campaign performance at a level that is completely different from classic OOH. Third, whenever we sell audience based on programmatic, in more than 8 cases out of 10, we achieved a higher revenue per impression than on classic campaign, thus higher yield. This is made possible by combining first, second and third-party data. Today, programmatic is around 11% of our digital revenues versus 85% in web and mobile. The catch-up potential on the same inventory is huge.

On the next slide, as you can see on the left, you have advertisers and agencies, large media groups, independents and digital agencies. Then the DSPs with displayce in the major third-party DSPs, OOH or multichannel such as The Trade Desk. Then you have the SSPs with VIOOH, our open platform available to JCDecaux, but also more importantly, to third-party media owners. On the right are the media owners.

If we have not moved up the value chain with VIOOH and then displayce, we will leave a significant share of value on the table. We are now onboarding other major players, as you can see. OUTFRONT in the U.S. is joining VIOOH recently and others may follow. Our full ad tech stack is unique in our sector, although this value is not yet fully reflected in our share price.

Our conviction on the next slide is that AI is primarily an enabler for us. Our assets are physical, in cities, in transport networks, in retail environment, and it's a critical path of audiences. AI will transform, as we all know, our ways of working, collaborating, automating our business processes and increasing the productivity of our media, but it will not replace premium real assets such as bus shelters, metro network, airport screens or retail screens.

We have highlighted here a few use cases in campaign creation and planning CampaignAI by displayce, optimized planning and trading through a simple prompt, while The mAlker generates tailor-made visuals customized for each location for both print and digital campaign. For content moderation, KIS automatically screens creative to pre-approval visuals and accelerate validation. For content optimization, Optix leverages attention, prediction and optimization technology to maximize campaign impact. Again, our physical assets are, therefore, structurally resilient and AI enhances their value by improving productivity, creativity, targeting and more importantly, measurement.

This Slide 31 highlights the strong potential of DOOH Retail Media for JCDecaux. Our new exclusive partnership with Carrefour Carmila, Unlimitail is a key milestone. The data-driven OOH/DOOH network will be deployed across 161 shopping centers in 297 access areas in France from 2026 and 91 shopping centers and 88 access areas in Spain from 2027.

Retail Media, as you know, is already a significant and fast-growing activity for JCDecaux [ with ] close at 90% of revenue coming from digital across 44 countries, leveraging our partners' data and enabling highly targeted contextual and programmatic DOOH campaigns. Globally, the retail media market represents $174 billion opportunity, including online. Retail media has already overtaken TV in the U.S. and is growing fast in Europe, a major growth driver for DOOH as 85% of retail sales still take place offline in stores.

DOOH Retail Media is expected to grow at 11.6% on a CAGR basis between 2025 and 2031. Combined with our broad portfolio of leading retail partners, this positions JCDecaux very strongly to capture the acceleration of DOOH Retail Media.

Moving on to the next slide, 32. As you can see, airports remain a structural growth driver despite episodic crisis. And over the long-term, air traffic grows by 3% to 5% per year and the projection from 2025 to 2030/2040 are very solid, including a plus 3.9% for 2026 and more than 23 billion passengers by 2054. We are uniquely and extensively positioned to capture this growth as we operate advertising concession in 154 airports worldwide, including now 14 of the world's 25 largest airports.

With the next Slide 33, we would like to illustrate how OOH Media, driven by digital innovation and growing audiences, continued in 2025 to gain market share in several major markets in the top 10. Over the past 10 years, OOH has gained around 5 percentage points in the media mix in Germany, Brazil and Australia and added roughly 1 percentage point year-on-year, now accounting for more than 10% of the total advertising spend.

On the next slide, you can see the main upcoming tenders. Among the most significant in Street Furniture are contracts such as Klepierre Retail in France, Transport for Greater Manchester in the U.K., Hamburg and Dusseldorf in Germany as well as Washington and Vancouver in North America. In Transport, key opportunities include AENA Spanish Airports, Wiener Linien in Austria, Torino Metro and buses in Italy, several major U.S. airports, which are not -- which -- where we are not incumbent at the moment, such as Chicago, San Francisco and Phoenix as well as Hong Kong in Asia.

On the next slide and moving into the sustainable part of our presentation, as you know, basically, JCDecaux stand by being the sustainable media company. First, we have a virtuous business model. In fact, 46.7% of our revenues is already aligned with the EU taxonomy through the financing of public transportation and our 2050 net zero climate pathway approved by the SBTi target by 2025 versus 2019, a 68% reduction in emission on Scope 1 and 2 and a 42% reduction on Scope 3.

Second, as you know, we keep innovating to support the ecological transition beyond promoting public transportation. Our bus stops are used to enhance urban biodiversity, as illustrated by the pilot project we won in Paris in 2025. And third, we apply a robust approach to measuring our impact with the JCDecaux 360 footprint tool, which covers carbon, water and economic and social dimension. This tool is already available in several countries, including France, the U.K. and Brazil and is being rolled out to additional markets from 2026 onwards.

We also operate in an OOH market that remains highly fragmented, where we are the #1 player and the only truly global OOH media company. We even see a form of deconsolidation. In fact, some U.S. -- some large U.S. players have scaled back their international presence. New names appear, such as Bauer Media, Arabia, some Brazilian operators, but the overall structure is still that of a very fragmented market overall. These fragmentations leave ample room for us to grow, both organically and through selective consolidation.

On Slide 37, our key takeaways for today are as follows. First, solid underlying revenue growth in 2025, driven by digital despite the challenging macroeconomic environment, as we all know. Second, programmatic continues to increase its share within digital revenues. Then strong operating leverage with a 150 basis points improvement in the operating margin, a continued tight control over OpEx and disciplined selective CapEx allocation, 2026 financial targets already achieved 1 year ahead of plan, including an all-time high level of free cash flow generation. Then the dividend, as it was highlighted by David, will be proposed at the next AGM at EUR 0.65 per share.

Finally, with a solid business momentum in early '26 with no material impact observed to date from the recent Middle East conflict, we expect above 5% organic revenue growth in Q1 2026, including a positive impact from the 2026 Milano Cortina Winter Olympics and the revenue growth turning positive in China. Going forward, building on this momentum revenue, we expect to continue to gradually increase our financial -- our key financial metrics, including margins and cash generation.

We thank you for your attention, and Jean-Francois, David and I are now ready to take your questions.

[Operator Instructions] We will now take the first question coming from the line of David Amorim from Berenberg.

[Foreign Language] Congratulations on the solid set of results. I have 3 questions, please. First, I know that you only guide by quarter, but how should we think about the growth for the rest of 2026? Q1 is the quarter facing the toughest comps. Should we expect growth above 5% level from Q2 onwards as well?

Secondly, in China, you mentioned a return to positive growth in Q1. Could we explain what changes are you seeing in the region? And what is actually new or improving there?

And finally, obviously, the advertising markets continue to be challenging, but momentum for JCDecaux is improving. What has changed in your discussion with your client between the start of this year and last year?

[Foreign Language]

I will take your first and third question, and Jean-Charles will take the second one. So the guidance of above 5% does not benefit from the new contracts that we signed, announced last year only marginally. So going forward, we -- it's hard to predict, obviously, given the current geopolitical situation. But what we can say is that from Q2, Q3, Q4 -- Q2 onwards, we expect to have some tailwinds from the new contract wins, including Barcelona, Stockholm in the second half of this year. it will be Carrefour because we need some time to build the new Inventory as well as Denver, which are significant contract wins, which will fuel the organic growth rate.

Pacing numbers right now for Q2 are pretty strong. And it's obviously impossible to predict if the oil price continues to be above $100 per barrel, what will be the impact on the economy. And if the economy starts suffering worldwide, it will have an impact on the advertising market. And Decaux -- JCDecaux is not operating in a vacuum, and we will be affected as well.

So overall, we are quite optimistic about 2026. And also, you need to take into account that we already have about EUR 20 million booked extra money, extra advertising spend booked as a result of the World Cup, which will take place in North America as well as in Mexico. So we have this effect as well, which will mainly affect Q3 of this year. So overall, 2026 should be a good year for JCDecaux. Having said that, if the world economy starts to suffer from the geopolitical tensions in the Middle East, this could have an impact as well.

On China, 3 major drivers for this, I would say, positive return in Q1 2026. The one -- the first one is, as you can imagine and as we have highlighted this in previous calls, the gradual increase of digital -- digitization in our Chinese environment, both in airports and in metro is clearly benefiting our growth profile in the country.

Second, a bit more, let's say, optimism in some client categories and a big boost from the giant tech companies which is interesting to see because -- we can see that in the U.S., we can see that in China when the big names in the tech sector is really using our products and solutions in the different environments in China to boost basically their brands, to boost their solution to their audiences.

And third, as you can imagine, the Chinese New Year this year was the biggest ever travel experience in terms of number of people moving around China. So those 3 factors are really helping the Q1 numbers.

The key question will be what about Q2? Q2 is also looking good, but still to be seen and early to be called. But basically, those are the 3 factors that are sustaining basically our positive return in the Chinese growth finally in our portfolio in China.

On your last question, no real change with our customers and clients, advertisers in terms of sentiment. Out-of-home remains an attractive media solution, especially given the decline of TV audiences. Free-to-air TV is in decline, and we benefit from that, for example, in markets like Germany, Australia, highlighted by Jean-Charles in his presentation and -- i.e., the win of agency advertising spend, which is very significant, if you look at the last years where our share of ad spend continues to increase.

You should also take into account the fact that we've got a lot of new clients coming through the new trading channel, which we call programmatic, which is programmatic, which is growing at twice the rate of digital, which is now representing in Q4 of last year nearly 45% of sales. So when you have digital growing at double-digit, just want to remind you that we had a 16% compound organic growth rate in our Digital segment. And when you have programmatic growing at twice the rate of digital, it fuels the growth. And that's why we are now firing on another cylinder, which we didn't have a couple of years ago, which is programmatic trading, which is now representing 10% -- bit more than 10% of our digital sales.

We will now take the next question from the line of Marcus Diebel from JPMorgan.

Congratulations [indiscernible] results. I have questions -- The first question I have is on free cash flow. And David, there was obviously a very strong swing factor in terms of working capital, the EUR 33 million. Conceptually, how shall we think about working capital management going forward as well? If you can help us sort of like what would you say is a sort of like normalized working capital number? Are there any one-off effects in the sort of like impressive performance this year, that would be quite helpful.

And maybe then one question for Jean-Francois on the discussion about VIOOH. Slide 29, you were talking about adding another 8 SSPs. Could you tell us a little bit more about the sort of like development of other parties joining the platform? That would be very interesting.

Okay. Thank you, Marcus. David will take your first question, and I will answer the second one.

As you know, working capital is always quite difficult to forecast precisely. As I mentioned during the presentation and as you properly indicated in your question, the improvement in 2025 is mainly coming from the work we did on inventory optimization. Trees do not grow to the sky, and we can consider at some point that our working capital is now broadly normalized.

In 2026, working capital should normally roughly follow top line evolution. And therefore, if the momentum we are currently having in our trading continue, the working capital should have a negative impact on the free cash flow in 2026. But obviously, we will continue to mitigate this impact, and we will continue our active action in terms of working capital management. But when you look at our free cash flow before working capital, as I mentioned, is very strong at EUR 284 million. And so driven by good operating performance and CapEx discipline, we should continue to grow our cash flow generation.

Okay. Perfect. Can we just say just conceptually, just since I have VIOOH, the cash conversion, so free cash flow '26, should we assume broadly the same percentage of operating margins just conceptually?

It's -- we are not guiding on that. And we should -- as I mentioned, our focus and our target, Marcus, is to continue to gradually increase our key metrics, including our operating free cash flow and our cash generation.

On your second question, Marcus, so SS VIOOH, as mentioned earlier by Jean-Charles, is the most connected supply side platform in the Out-of-Home media sector with 65 DSP connections, including DV 360 and operating now in 35 markets. For many years, there has been some skepticism about the ability from VIOOH, given that JCDecaux is the majority shareholder to attract big Out-of-Home media companies, what we call third-party media owners. And so far, we were able to attract the small guys as well as Out-of-Home media companies, which are related to JCDecaux such as Metrobus in France, where we have a minority stake and APG.

The recent announcement by VIOOH with OUTFRONT putting its inventory on the platform is very good news. And I think that this is driven -- I cannot speak on behalf of VIOOH, but I think that this is mainly driven by the fact that those American billboard companies are lacking some international trading. The fact that we have, for example, a VIOOH in China and that Chinese brands are expanding, think of BYD, but -- you name it, there are some other brands as well, is, I think, one of the main reasons why those companies are now interested in joining VIOOH in order to capture international Out-of-Home media spend, which will be traded programmatically. So we are having this -- they are having discussions with some other big Out-of-Home media owners, which are looking promising, but it's obviously quite a significant event for VIOOH now to have the OUTFRONT inventory, which is the second largest billboard company in the U.S. after Lamar on its platform.

And again, in summarize, it's mainly due to the fact that we are -- VIOOH is now the leading SSP in many -- over 35 markets around the world.

We will now take the next question from the line of James Tate from Goldman Sachs.

It's James Tate from Goldman. I had a few questions, please. I guess, firstly, could you just talk a bit more about your exposure to the Middle East? I think it's around 5% of revenues. And I guess within the mix, which Middle East countries do you have the greatest exposure to? And is it mainly within airports? And I guess what impacts have you seen to current booking trends since the escalation of the conflict a couple of weeks ago? Any color here would be very helpful.

And secondly, on EBITDA, that was much better than expected for '25 and ahead of your 2026 targets. I think you've guided to a gradual increase going forward. Could you give some more color on the moving parts for '26 in particular? And perhaps remind us what the right way to think about the normalized flow-through of revenue to EBITDA?

Thank you, James. Jean-Charles will take your first question on the Middle East, and I will take the second one on the EBITDA. So on the Middle East question, James, so we -- the Middle East represents a bit less than 5% of our total revenues. Today, the Middle East region is reported within the rest of the world. In the Middle East, we are mainly operating in the airport environment. And our major exposure is in Dubai, in the Emirates, followed by basically, to a lesser extent, Saudi Arabia. And we have mainly Street Furniture -- then Street Furniture in Qatar and in Oman.

You're right in your question to say where we are the most exposed. I mean, today, what we have to understand about the Middle East situation is that depending on the country, the conflict is not exactly -- does not have the same intensity. So today, Saudi Arabia, Oman is less exposed, more exposed Abu Dhabi, then Dubai, even though they are very close. And also Bahrain is quite exposed.

So our view is absolutely difficult to say, James. So far, the situation is not -- as we said in our guidance for Q1, we said that we don't see major impact. But if the conflict continues, EA intensifies, it is for sure that will have an impact on our business. And so we will try to deal, as we have always done it before in crisis, with our clients, with our partners at the airport where -- they are our partners. So it is a 3-party discussion, and we will do our best to mitigate, obviously, the impact on those brands.

I think the Middle East remains a region where the different states of the countries are trying to keep the business as usual, if I may say so. And so the people are calmed, our teams are working -- are distance working at the moment for security reason, but the business is operating normally, even though obviously, the situation is quite tense in some countries.

So that's what we can say today. To say more than this will be certainly political friction because things can change by the day, obviously. And so we have to be very reactive. We have to be -- we have to adapt ourselves. Our people are safe at the moment. We have -- most of our people are [ obviously ] local people. So I'm not going to say they are used to those kind of situation, but they are prepared because this is a region where tensions, they have always been around. In this case, it's obviously a bigger tension than ever before so far. So that's where we are at the moment. So limited exposure, but an exposure. And the key question will be the duration of this conflict, that will obviously impact more or less our operations in the region.

On your second question, James, there's no doubt for the management of JCDecaux that we want to continue to improve our operating margin rate, which is at 20.9%, meaning above 21% and going to 22%. We can't give you a timetable on this. Obviously, we have the major contract wins, which will impact the operating margin rate to start with, as during the ramp-up phase. As you know, we are not getting 100% of the revenue in year in the so-called [ random ] phase means that we are not able to optimize the operating margin on this contract. And that has obviously, at the beginning, some impact on the overall operating margin rate of the company.

Having said that, as mentioned in our press release, we want to continue to gradually increase both the overall number as well as the operating margin rate. And we are working hard on that as demonstrated in 2025, where in the end, we ended up being 1 year ahead of our target. But we cannot give you any guidance on this. But be assured that we are working very hard to continue to increase both the overall number as well as the operating margin rate.

We will now take the next question from the line of Jerome Pain from ODDO BHF.

Three quick questions on my side. The first one is on the CapEx for 2026. So what should we expect given the contract that you recently won? And is there any add-on linked to AI? And maybe more generally, could you make an update on the CapEx requirement and demand that you see regarding the ongoing call for tenders? That's my first question.

Second one on VIOOH. So you mentioned the nice partnership that you signed with bigger players. Could you just make an update on the capital structure because I remember that a few years ago, you were open to -- open the capital structure, which has not been the case. Is it still a project or not anymore?

And lastly, maybe just a general update on the fees. So you made a lot in the last few years in terms of restructuration and reduction of the minimum guarantee, especially in China. Is there still to come or most of it has been finished now?

Thank you, Jerome. David will take the first one. I'll take the second one and Jean-Charles, the third one.

Regarding your question on CapEx level, we are working hard in 2026 to remain, or to keep our CapEx level in a range of 7% to 8% of the revenue. As you mentioned, with new contract deployment, potentially, this will push the CapEx towards the top of the hand. Regarding the profile of the CapEx, we will continue to invest around 40% of the total CapEx into digital.

Regarding AI, we are investing quite a lot in our IT system, as you know. AI is included in our IT and technology called investments. So this has grown over the past few years. It will continue to be, or to stay in the same range as what we are currently. We are investing about between -- about 3.5% investing -- our cash out in IT is about 3.5% of our total revenue and will remain in this kind of envelope.

On your second question regarding VIOOH equity, JCDecaux remains the majority shareholder. I just want to repeat that the press release on the partnership with OUTFRONT didn't come from JCDecaux but from OUTFRONT -- from VIOOH. And reason being that the company is a separate company. We have an independent Chairman who used to be the leading outdoor advertising guy at WPP and GroupM. So I think that also is the reason why the big guys are more relaxed about them joining. We never get any specific numbers on their trading volume, so that it's truly an independent company despite the fact that we are the majority shareholder.

So far, we haven't had any discussions on them joining as an equity partner. Having said that, that could change in the future. Bearing in mind that there is also an ongoing consolidation in the sector, which is happening because there are too many SSPs. There is also consolidation on the DSP side. So it's too early to tell you whether or not some third-party media owners will not only join the SSP platform VIOOH by putting their inventory on the platform, but also by becoming an equity partner. We would certainly encourage this move because at the end of the day, it's a long-term goal, but we want to become the kind of the DV 360 of Out-of-Home media. That's the goal.

And given that our inventory is, for example, in Transport sector, it's competing, but not competing because most of transport franchise agreements are exclusive. So either you have Paris Charles de Gaulle Airport or you don't have it, you have Heathrow or you don't have it, you have New York or you don't have it, meaning that the inventory is very complementary between, for example, in the U.S. Clear Channel Airports and JCDecaux Airport.

Of course, we are competing for the franchise. We just won Denver against Clear Channel, which was the incumbent. But at the end of the day, when the Chinese brands wants to use this channel, it obviously makes sense for them to use the SSP which has the best connections with -- or which has the best inventory -- airport inventory worldwide by adding their airport footprint because at the end of the day, we don't have New York anymore. So rather than having different SSPs and having to deal with 2 different SSPs on Chinese brands trying to advertise in New York, then having just one kind of a one-stop shop solution, SSP solution, offering them the biggest airport platform, mixing Clear Channel or some other third-party media owners, which have some other airports as well, makes common sense.

So therefore, I'm quite optimistic that we will manage to get some more third-party media owners. And I think they realize now that what we said from the beginning that we want this company to be independent and to be trading also in the interest, not only of JCDecaux, but also in the interest of third-party media owners, is reality. It's not bullshit.

On China, so the situation on China is that -- regarding your fees-related question, Jerome, most of the work of reassessing basically the fee base on the contract after COVID and so on is over now. I think now we are on a strong basically basis now to grow the business again. But on the fee, most of it has been done.

And you always have on the portfolio of so many contracts all over the world, some fees assessment and discussion depending on different situations. The Middle East, for example, will be an obvious one depending on the duration of the crisis and the magnitude of it, depending on the contract. So it would be a contract-by-contract analysis in the best interest of the stakeholders. So what we can say at the moment is work is in progress always, but the major bulk of it in China is over now.

We will now take the next question from the line of Conor O'Shea from Kepler Cheuvreux.

Congratulations on the results. Three questions from my side. Firstly, on the -- on your biggest client sector, Luxury and Fashion, 18% of revenues. I think Jean-Francois, you mentioned minus 5% in '25. Are you seeing that spend weaken further? I think there's been some reports from within and with that sector that spend is under incremental pressure? Or is that not what you're seeing at the moment?

Second question, just in terms of the contribution from the new wins, the most significant ones, Denver, Stockholm and so on and the sports events, on a full year '26 basis if you could just get a sense of that? I appreciate the EUR 20 million number on the FIFA World Cup. But if you could maybe just round up and get a rough estimate of how much that's contributing in '26 either on a reported basis or on a run rate basis, that would be great.

And then just a final question, just -- I think it's implied by your comments in the Q2, but just to check in the Q1, was the trading in terms of growth quite even from January, February, March across the months? Just a little bit of color on that would be helpful.

Okay. Thank you. Jean-Charles will take the luxury question. I will take the second one on the new wins, and David will take the third one on Q2.

So as a matter of fact, Conor, we -- basically on the luxury brands and -- so the dynamic remains, I would say, very solid. The minus 5% that was highlighted in our presentation this morning and commented by Jean-Francois earlier in the presentation, has to be taken into account of a very strong Olympics Paris event in 2024. So the minus 5% was also impacted by this predominance of luxury brands communicating around this major sport event in Paris, which is, as you know, the most visited city in the world. So that was impacting. But so far, we don't see any slowdown, I must say, around the globe. So that's number one.

Now again, coming back to the Middle East, the Middle East, obviously, will -- could have an impact. But for the Middle East, the luxury brands is interesting because if the Middle East for us is minus -- is less than 5% for the luxury brand as a whole, I'm not talking about specific groups, is also less than 5% of their revenue exposure. So it's an important region, obviously, for everyone. It's a region where you have a ticket sale average which is higher than in other regions around the world, but it's a lower region in terms of impact than what China could be or U.S. could be or even Europe could be.

Having said that, so that's what we can see on the luxury brand. I think our solutions and our products remain very attractive. Especially what we see is that we see in some other hubs around the world more and more luxury brands or skin care brands or health and health care coming into our environment, so which is certainly a good news. So we don't see a major change in the dynamic versus what we saw in 2025 with, again, the 2024 which was very strong because of the Olympics in Paris and in France in general.

On your second question, so I can confirm that the EUR 20 million benefit from the World Cup in the U.S., impacting positively the U.S. and Mexico. Regarding the contract wins, there has been some delay both in Barcelona as well in Stockholm. I remember, Stockholm was announced in 2024 and was signed late in 2025 due to a legal challenge from the incumbents. We were not the incumbent. Same in Barcelona, a contract was signed recently as a result of a legal challenge from our competitor, the incumbent, because we were not the incumbent in Barcelona.

So this means there's been some delay in both signing the contract following the award. And as a result, the deployment of the digital screens will not happen, for example, in the Stockholm Metro before probably the beginning of Q3, bearing in mind that we are going to be deploying the largest cross-track digital screens ever installed in the world, 18 square meter at the platform. Cross-track is going to be hugely impressive. So we have to sort out some technical issues because as long as the contract was not signed, we didn't have access to the platform and to the engineers working for SL. SL is the RATP of Stockholm.

In Barcelona, we have, as indicated in our press release, a very significant digitization plan with at least 300 digital screens, which will complement Madrid, where we have a strong position with the bus shelters and the underground. So that's why it's very hard to give you a number at this stage as opposed to the World Cup due to this postponed signature of the contracts. But if we were able to give you a number, obviously, we would. But at this stage, it's very hard to give you a number. But nevertheless, this will be a tailwind for the organic growth in 2026.

Okay. And also 2027, presumably given the...

Yes.

Stage rollout? Okay.

And Conor, regarding your question on the Q1 trading across the month, what I can say is the start of the year was quite positive across all business segments and with close to mid-single-digit growth. The month of February was quite good, close to double-digit revenue growth, mainly driven by the Transport business segment and China with the Chinese New Year that has been mentioned by Jean-Charles before, and also to a lesser extent with the impact of the Winter Olympic Games in Italy.

And regarding the month of March, the jury is still out. The momentum is positive, especially on Street Furniture and -- on the Street Furniture business segment. Across the quarter, only 2 geographies -- one geography is suffering a bit, is Germany with having some headwinds. But otherwise, across all geographies, the momentum is quite good and March is going into the good direction in order to deliver the guidance.

Just to complement on what David just said, obviously, the trading timing varies from market to market. But to give you an example, in the U.K., which is our second largest market, we do 25% of the revenue of the month in the month. So when David tells you that it's -- March is still -- obviously, we are pacing well, but it's still not done. But in a market like the U.K., 1/4 of the revenue of the month is done in the month. So that shows you the short-term nature. France is a completely different story. We are more advanced in France due to various reasons. But there is -- the short-term nature of our business is very different from market to market.

We will now take the next question from the line of Bern Clanton from Barclays.

I think most have already been answered, to be honest. But just a final one from my side. On your retail media initiative, can you remind us of the expected contribution to revenue and also maybe how we should think about the impact on rent and fees on that front?

Yes, that's a good question. The -- That's a good question. The only thing is we don't disclose the subsegments within retail is within the Street Furniture part of our business. So we don't disclose the subsegment. As you can imagine, we already give a lot by segment, by geography. And so we -- I can't really give you the magnitude, but it's a business that is growing.

In terms of rent and fees, you have basically less CapEx versus sales and basically a bit more rents and fees than in the current Street Furniture business model. So it's a business model that is in between Street Furniture and transport, but we don't disclose those numbers. It is a global number within our Street Furniture, which represents, as you know, 50-plus percent of our total revenues.

And it's a growing business, and it's a digital business. And it is, I would say, a very good complementary business in the geography where we operate. It's mainly driven by digital and data. This is certainly one of the few, I would say, environments where programmatic is taking the lead because of the nature of the clients, because of the nature of the profile of the audiences and because of the quality of the data that we are basically giving to our clients because, as you know, and this is something important, I think, for you to understand that when we do a retail media deal, whether it is with Tesco in the U.K. or whether it is with Carrefour Carmila, Unlimitail in France or in other geographies, we have access within our contract structure to the data and the ticket sales per day, per hours, per week. So it's a quite interesting basically trigger for our programmatic platform, not only for the retail itself, but also more globally. So this is something that is helping us to grow this business.

And there is a trend which is interesting that -- especially outside of the U.S., there is a trend of basically now having basically exclusive contract with some basically Out-of-Home players. So it's something that we see growing on different regions, not in the U.S., but outside of the U.S., this is the case at the moment.

We will now take the next question from the line of Nizla Naizer from Deutsche Bank.

I also just have 2 more questions remaining. The first -- thank you for the color you gave on the fees in China. But my question is, are you actively also looking at renegotiating and lowering your fees, lease expenses in other parts of the world as well? And how could this be a positive sort of contributor to margins in 2026? Some color on your efforts there would be great.

And second, on the AI solutions that you described, they're all quite interesting. Just wanted to check if this is also going to be used as a tool to go after more small and medium-scale clients globally to sort of get them on to the Out-of-Home inventory space a bit more aggressively as well? What are you thinking in terms of the impact that could bring if you go after more SME sort of clients with these new AI initiatives?

Okay. I'll take the first one. Jean-Charles will take the second one on the small SME, basically the long tail, which is the strength of the large online companies such as Google and Facebook.

So on the first one, a contract is a contract. So the renegotiation which was done successfully by the teams in China, was led by the fact that there is a new China that the consumption is not where it used to be. And therefore, our landlords in the end agreed that the reset was necessary, bearing in mind that in a lot of Chinese contracts, we had a joint venture. So we're in equity partners with the -- our landlords.

The other example, which I can give you about reset was the COVID. Obviously, we had, as you know, a very major reset strategy during COVID, very successfully in some regions, but not so successfully in other regions. And -- So once the contract is signed for 10, 15 or 20 years, we are bound to the terms and conditions unless there is a significant event which allows us to renegotiate the contract in good faith. So don't expect major contract renegotiations in other parts of the world.

Obviously, having more -- nearly 4,000 cities, 157 airports, there is always some reasons to renegotiate. Middle East will be -- obviously will be one. If airports are being closed because of having less passengers as a result of the ongoing war with Iran, then our teams will obviously start renegotiations of these contracts. But apart from those external events and some other very local events, for example, I could name Amsterdam with the ban on fossil fuels, which hasn't been enacted yet, well, there is no doubt that we will -- even if it has not such a significant impact on the top line, it's a decision by the authority to restrict the abilities to reach -- in fact to sell to all categories, such as a couple of years ago in London which -- HFSS. And this is another reason where we can have some renegotiations.

But those renegotiations are reflecting the fact that we cannot maximize the revenue. So it's a good faith renegotiation. But the top line has some negative impact -- negatively impacted by those local events such as bans. And therefore, the renegotiation is, in our opinion, a normal renegotiation between partners -- long-term partners. But having said that, it doesn't necessary trigger a better profitability because the top line is missing some advertising spend from those categories which are banned.

But this is, again, it's very local. For example, HFSS, which was done in London, didn't happen in many markets around the world. So there is no -- you cannot take from what I said a kind of a trend regarding bans of certain categories in -- around the world.

On AI, different aspects. First of all, AI is in action at the moment within the group, is in action, obviously, also within our ad tech platform. In other words, as I mentioned earlier in the presentation, within the campaign creation and planning through CampaignAI by displayce. Displayce was the first DSP in the market to optimize planning and training through a simple prompt in display. So we are trying to basically simplify and accelerate the media planning and the media buying on the Out-of-Home.

We also had an initiative, which is interesting with AI inside, obviously, with the creation of tailor-made visual customized for each location for both print and digital campaigns. And this is already done and in action. Now we have to scale it up. We have to make it even more efficient. We have also on AI what we call the content moderation and content moderation is quite important to drive basically smoothly our thousands of visuals around the globe in different locations, because as you know, we are not a broadcaster. Every site could have a different visual across the globe. And this is automatic screening of visual to pre-approve them, which is very important and AI will completely change the way we monitor, we look and we do this process. And finally, on content optimization, we have what we call the attention prediction and optimization technology.

To your question on the platform to access basically the SMEs, all those tools are made to simplify, accelerate and get ready our go-to-market for medium-sized companies, so to reduce the way it takes to plan and to execute the campaign. And this is something very important. We do that, obviously, through our DSPs, through the SSP, and we also do that through our direct platform to access the SMEs in the market.

So it is obvious that AI will help us to address more the ATV market in the different regions where we operate, depending on the structure also of the local market because in some markets, our clients are mainly national clients, and this is working very well. And in other markets, you have a much more stronger local footprint, such as in France, for example, where 14% of our basically revenues is made with local or regional clients. So this is a new frontier for us. This is certainly over time a game changer. But as we all know, that takes a bit of time, but this is clearly progressing quite significantly over the last, I would say, 12 months when we see the number of people also adopting.

And when you look at the, for example, programmatic, which is also boosted by AI in most of its processes, is growing at the moment basically at 20%, where digital is growing at 10%. So this is quite encouraging for the future, I think, of our industry, which is benefiting from certainly AI enabling us to access those clients.

We will now take the next question from the line of Laurent Gelebart from BNP Paribas.

I have 3 questions. The first one, could you elaborate on your new global programmatic offer targeting street furniture, transport and retail at the same time? I know it is a fairly recent offer, but what is the market response? And what do you expect mid-term on this initiative?

The second one regards the cash proceeds from APG|SGA. So what are you going to do with this?

And the third one regards VIOOH. If other equity partners join the party, do you still wish to keep the control of these assets?

Okay. I'll take the first one. The second one, cash proceeds from -- will be taken by David. Jean-Charles will take the third one. Second one?

The first one, my answer will be very quick. It's too early to give you any response on this one.

Second one. Regarding APG -- the proceed of APG, I have to just mention that the transaction is not yet done. It is clearly going into a good direction since APG has the approval from the AGM on the opting up mechanism.

To your question what we will do with the cash proceeds, we will do exactly the same as we did with the proceeds from the first transaction. We will invest in our business with higher return than that we could have with this cash. So it will be reinvested in the business.

I think it's worthwhile mentioning that selling at CHF 2.20 per share, the multiple that we get from this divestiture is between 13 and 14x. So it was an opportunistic decision to reallocate the cash in markets where we need to speed up the digitization. And as you can see, selling a minority stake at 13x reflects the quality of the asset, APG, which has been in business for the last 126 years, created in 1900. But the company is not growing. It's a mature market. So we felt at the Board that it was a wise decision given that we received a very attractive offer. If you consider that we are trading at between 5 and 6. We used to be trading at 9x. Clear Channel was sold to Mubadala at 12, 12 plus 12, and we are selling a minority stake in Switzerland and nearly 13 and 14. I think it's a good trade for us. So that's why we did it. And we are expecting now the antitrust decision in Switzerland, which should happen soon.

So regarding the shareholding structure of VIOOH, you remember that we always said that basically we will take an entrepreneurial view on creating this SSP back -- 6 years ago now, a bit more than 6 years ago, 7 years ago, number one. Number two, we -- you're right to say that we are the majority shareholder. We have more than 95% of the shares of this company, but we want to operate it independently as it was said before for obvious reasons and for the benefit of, obviously, all the stakeholders taking part on view, and I think more and more are coming, as you can see, from all over the globe and all over the world.

And finally, we are open-minded to continue to grow this platform. It is clear that from 95% shares a bit more to remain majority shareholder is something that we will consider. But if there is a transaction that makes sense to grow, to transform the business and to boost basically the programmatic revenue, we will consider anything that makes sense to boost basically our programmatic development and the programmatic development of the industry because we think that this is clearly something that could be a game changer given the magnitude of the market to really help boost Out-of-Home advertising in terms of market share.

So as you know, in JCDecaux, I think we have 2 things that will always remain entrepreneur vision on anything we do. And second, very pragmatical approach on everything we look at when it comes to transforming basically existing businesses in making it bigger for the whole industry. So VIOOH is bigger than us in the sense that we are attracting a lot of interest from third-party players. As you can see, the most connected DSP on one side, SSP on one side and also very diversified in terms of geography. So practical approach, if at some point, we have something -- we can do something which makes sense to boost this business. And it's only the beginning because this is growing year-on-year.

We will now take the last question from the line of Eric Ravary from CIC CIB.

So I have several questions on VIOOH to assess the operating leverage potential of the business. So what is -- was it profitable in 2025? And could we have an order of magnitude of the EBITDA of VIOOH last year and also the number of people you have in VIOOH and your plan for new hiring in 2026 and also the kind of operating costs you expect on VIOOH this year?

David?

Regarding VIOOH, as we said, I think I remember we had the question, it was in the half year result, 2025 was a year where VIOOH turned slightly positive in terms of EBITDA, still consuming cash in order to invest in the platform, should turn positive in terms of cash very soon. But when we look at the profitability of the platform at consolidation level, group level, as you know, as 50% of the revenue is incremental that we get from programmatic, its benefits to our group operating margin overall, so which is quite accretive, this new revenue stream.

Looking at the headcount, we are quite currently, I wouldn't say at maturity, but we have reached a level in the platform where we continue to develop the platform with the current team. Obviously, we could have some evolution in the headcount, but we are not expecting any significant evolution in 2026.

There are no further questions at this time. I would like to hand back over to Jean-Francois Decaux for closing remarks.

Okay. Thank you. Thank you for your questions, and don't have anything else to add because the questions are covered pretty much all the important topics. So all the best. Have a nice day, and talk to you soon. Bye, everyone.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Ladies and gentlemen, welcome to the JCDecaux 2025 Half Year Results Presentation. I will now hand over to Jean-François Decaux, Chairman of the Executive Board and Co-CEO. Sir, please go ahead.

Good morning, everyone, and welcome to our 2025 half year results conference call. The speakers on this call will be Jean-Charles Decaux, Co-CEO; David Bourg, Chief Financial, IT and Operations Officer; and myself. Remi Grisard, Head of Investor Relations, is also attending today's conference call.

Moving to Slide 4 of the presentation. You can see that our unique and well-diversified premium out-of-home global media footprint recorded in the first half, a very strong robust revenue growth and a strong operating leverage in a very challenging and uncertain macroeconomic and geopolitical environment despite a mid-single-digit decline in China. Our revenue increased by 3.4% year-on-year in H1 2025 and by 3.3% on an organic basis, driven by digital out-of-home, which rose by 12.2% to nearly 40% of total revenue, with programmatic digital out-of-home up an impressive 25.2%.

Key operational indicators showed strong double-digit growth, with over 75% of our revenue growth translating into operating margin. As a result, we increased our operating margin by 17.6%, with a year-over-year improvement of 200 basis points as a percentage of revenue, a significant step-up. Our EBIT before impairment charges grew by 11.6% to EUR 125.6 million and even more by 114.7% when excluding nonrecurring items. Finally, our operating cash flows also rose by 10.7%, but David will cover that in more detail in just a moment.

On Slide 5, you can see that we recorded an organic growth rate of 3.3% in the first half of 2025. We had a very strong first quarter with 5.5% organic growth, and Q2 followed through nicely. In fact, we delivered a record second quarter revenue, growing by 1.6% organically, right in line with our guidance of low-single-digit growth. If we exclude the one-off impacts from UEFA Euro 2024 and the Paris Olympic Games, organic growth in Q2 would have been closer to 3%. Compared to Q2 2023, we delivered a strong double-digit revenue increase, which really highlights the robust level of activity this quarter. It's especially encouraging when you consider that we are still facing macroeconomic headwinds, including tariffs, and the decline in revenue from China. Overall, it's a solid performance, driven by digital and geographic diversification, with both JCDecaux and the broader out-of-home media market continuing to gain market share during this period.

On Slide 6, let's now move to the half year performance by activity, as shown on the next slide. Organic and reported growth were quite similar overall, as the positive impact of our acquisitions was offset by negative foreign exchange effects. Street Furniture maintained its strong momentum with 4.3% organic growth, even against a base that had benefited from sporting events in Europe last year. Transport continued its rebound, growing plus 3.2% organically despite a mid-single-digit revenue decline in China. Outside of China, growth was much stronger, reaching plus 6.4% organically. Billboard remained broadly stable with flat organic growth, mainly due to tough comparables in France and the U.K.

On the next slide, you can see that all geographic areas experienced growth in this first half, except the U.K., which decreased by 2.9% due to a very high comparable from 29.8% increase in H1 2024. North America was the fastest-growing region, expanding by 11.8%. We saw no impact on tariffs on advertiser sentiment. Rest of the World grew by 6.8%, driven by dynamic performance in key countries across both Latin America and the Middle East. France and the Rest of Europe aligned with the group average, despite the impact of 2024 sporting events. Asia-Pacific grew by 1.3%, experiencing high-single-digit growth when excluding China.

Our unique business global premium out-of-home model is well diversified by activities, as well as by geographies. Street Furniture now constitutes 51% of total revenue. Transport at 35.2% has not yet recovered its 2019 revenue share of more than 40%. Billboard remains our smallest segment, accounting for 13.8% of total revenue. France is our largest country, representing 17.6% of total revenue, while Europe takes up nearly 50%. The U.K. ranks as our second largest country. We have decreased our exposure to China from 18% of revenue in H1 2019 to just 10% in H1 2025.

Turning to the next slide. Our client portfolio is well diversified with our top 10 clients contributing to less than 13% of revenue. we observed a healthy rotation among leading advertising categories. Fashion, luxury and personal care, our largest category at 18% of sales, turned slightly negative at minus 2%. Meanwhile, 2 categories showed double-digit growth: finance at plus 14% and services at plus 13%. It is interesting to note that consumption-related categories like FMCG and retail continued to show strong growth. Meanwhile, automotive has made a comeback into the top 10 after a long absence, taking the place of government.

Digital out-of-home remains a key growth driver as it grew by plus 12.2% organically in H1 2025. Digital revenue penetration rose by almost 3 percentage points year-on-year, reaching 39.6% in H1 2025 and 40% in Q2. Our digital revenue distribution closely mirrors our business mix, highlighting how relevant digital is across all 3 activities.

The next slide demonstrates that digital penetration increased across all 3 business segments. In Street Furniture, digital revenue climbed to 37.5% compared to 34.8% a year earlier. Digital revenue in Transport, our most digitized segment, grew from 41.2% to 44.5%. In Billboard, digital revenue reached 35.4%. Large digital structures such as the one represented here in Melbourne, significantly improved the profile of this activity.

By country, our digital penetration also increased but remained concentrated, as 5 countries, namely the U.S., the U.K., Australia, Germany and China, still account for 59% of total group digital revenue. We still have a lot of room for growth. As you can see, some countries are quickly catching up such as Germany, where the digital revenue share increased from 41% to 47%, and China from 27% to 32%. Brazil, represented here by the Sao Paulo Metro, also demonstrates strong digital revenue generation at 76%, although it's not among our top 5 digital markets in absolute terms.

Let's move on to the next slide with programmatic advertising, the fast-growing area, contributing to our digital revenue growth with higher yields. Programmatic revenues soared by 25.2% in H1 2025, reaching EUR 74.7 million or 10.1% of our digital revenue, up from 9% in the previous year. Programmatic revenues remain primarily incremental, sourced from smaller advertisers or from existing brands, launching new campaigns, employing more dynamic and refined targeting. This slide features a Nespresso campaign targeting coffee enthusiasts aged 18 to 44 in Germany during morning hours, integrated with other media formats, including analog outdoor. We anticipate continued strong growth for programmatic revenue with leading countries such as Germany at 35.9% and the Netherlands at 29.2%, surpassing the group average of 10.1%. We expect programmatic penetration to continue to rise and may double around 20%. Here, a campaign from France in Cannes demonstrates the real-time content adaptation between 2 visuals based on temperatures below or above 24 degrees Celsius. Even in countries with a low digital penetration, this clearly demonstrates how relevant programmatic can be for advertisers.

You will see on the next slide, our most important contract news for the first half of 2025. In Street Furniture, we have won the freestanding panels of the city of Rennes in France, the city of Odense in Denmark, and bus shelters in Firenze, Pisa and in Italy, as well as Fukuoka in Japan. Regarding Transport, we have won the Northern Rail contract in the U.K., and we announced 2 days ago the renewal of Brussels Airport.

Finally, we have confirmed our excellent ESG performance. Our performance was recognized as best-in-class by extra-financial rating agencies, including our placement on the CDP A list for the second year in a row and the Gold Medal status from EcoVadis. We have received as well, again, the best score, AAA, from MSCI. And Sustainalytics rated us as a low-risk company among the media. This clearly puts ahead of the competition in the media market by leading the way on ESG. Having said that, public procurement and advertisers have not fully factored this into their decision-making, at least not yet. But we are committed to pushing this forward because we believe ESG will become a key differentiator in the future. More broadly, I would like to emphasize that out-of-home media is among the least carbon-intensive media formats for advertisers.

I will now hand over to David for the presentation of our financial highlights of the year.

Thank you, Jean-François. Hello, everyone. First, let's have a quick look at the summary table of the financial results. As Jean-François said, a solid set of results, especially with a strong operational leverage, resulting in a double-digit increase in our key operational indicators, alongside a 3.4% revenue growth.

Our operating margin improved by 17.6%. EBIT before depreciation went up by 11.6%. And our operating cash flow strengthened by 10.7%. Our net income shows a decrease compared to H1 2024, but this is largely due to one-off factors. Same for the free cash flow due to timing differences in our working capital, on which, I will come back further in the following slides. Finally, we continue reducing our net debt by nearly EUR 44 million compared to June 2024, bringing it down to EUR 912.9 million, despite resuming dividend payments in May 2025.

On the next slide, let's take a look at the evolution of the operating margin. It has increased from EUR 261 million to EUR 307 million, an increase of EUR 46 million compared to 2024, representing 76% of the revenue growth. Once again, this underscores our strong operational leverage, thanks to the impact of the robust revenue growth on an effective cost management, as illustrated on the graph to the left. The growth in rents and fees during the period was limited to 1.3%, mainly due to contractual conditions in some concession adjusted to the level of activity, especially in China. Other operating expenses was virtually stable at plus 0.2%. Consequently, our margin ratio has increased by 200 bps, reaching 16.5% with growth across all business segments, as shown on the graph to the right. The Transport segment, in particular, has a more significant increase of 380 bps, benefiting from the contract adjustments in China that I have just commented.

Regarding our EBIT on the next slide, it stands at approximately EUR 126 million, a 6.2% increase, but plus 11.6% before impairment due to the reversal of provision for loss-making contracts in 2024. When adjusted for one-off items like the capital gain from the partial sale of APG|SGA for EUR 45 million in 2024 and reversal of provisions and asset disposal, our EBIT excluding nonrecurring items grows by [ 114.7% ], plus EUR 47.4 million. This growth in absolute terms aligns with the increase in our operating margin, thanks to the relative stability in our depreciation and maintenance spare parts.

Referring to the net income group share on the next slide, it is reported at EUR 76.4 million before impairment, as you can see at the bottom of the table on this image, reflecting a decrease of 15% or EUR 13.5 million compared to last year. However, after adjusting for nonrecurring items such as the capital gain on APG|SGA in H1 2024, we actually observed a growth of 86.1%, broadly consistent with the evolution of the EBIT before nonrecurring items, which I presented in the previous slide. A few points to highlight between the EBIT and the net result. First, the income tax with an EUR 18.7 million increase, stemming from the increase in operational results and a less significant [ acquisition ] of deferred tax assets on loss carryforwards than in H1 2024.

Looking at the financial results year-on-year, things are overall stable. We saw a EUR 2.7 million drop in IFRS 16 discount cost, thanks to a reduction in lease liability. On the flip side, there had been a EUR 3.3 million increase in net financial interest, which is mainly due to lower interest received on invested cash. But the cost of our net debt remained good at around 3.4% in H1 2025. Finally, there is a EUR 5.1 million improvement in our share of net results from equity affiliates, driven by improved operational performance from affiliates, mainly linked to contract adjustments in China, also reflected in the evolution of the restatement of the joint control entities at the top of the table.

Let's now dive into the cash flow analysis on the next slide. At the center of this slide, our operating cash flow amounts to EUR 153.7 million, a robust double-digit increase of 10.7%, but less pronounced than the increase in operating margin for 2 main reasons. First, there is an increase in net financial interest paid of EUR 10.7 million due to a temporary mismatch between paid and received interest. This should ease in the second half of the year as we no longer have to pay the coupon on the EUR 600 million bond, which was paid in last October. Then there is an unfavorable variation on the line other items amounting to EUR 5.9 million, mainly due to reduced dividends received from APG|SGA, following the sale of part of our shares in 2024, as well as one-off bank fees related to the refinancing of our revolving credit facility.

Below our operating cash flow, our net CapEx was lowered to EUR 118.8 million over the period, representing 6.4% of the revenue, against 7.8% last year at the same time of the year. Therefore, our cash flow after CapEx but before change in working capital requirements turned positive to EUR 36.8 million, whereas it was slightly negative in the first half of 2024. While the negative free cash flow is usual at this time of the year due to the seasonality of our activity, timing differences in working capital requirement as of the end of June 2025 negatively impacted our free cash flow to reach minus EUR 64.9 million in H1 2025 versus minus EUR 20 million in H1 2024. These timing effects mainly include a lower use of factoring for about EUR 25 million, lower payables, mainly linked to decrease in inventory and CapEx, and temporary shift in client collection between end of Q2 and beginning of Q3.

Finally, this last slide, which summarizes our strong financial structure: the net debt continuing to decrease, as mentioned in introduction, minus EUR 44 million compared to June 2024, and a temporary increase versus December 2024 due to seasonality of our activity and the dividend payments in May; a well-balanced debt maturity profile with no upcoming maturities before 2028; and a strong liquidity with over EUR 1 billion in available cash and an undrawn confirmed credit line of EUR 825 million recently renewed for 5 years with 2 optional extension years.

That's it for the main elements of our H1 financial results, and I now hand over the floor to Jean-Charles Decaux for the outlook.

Thank you, David, for this presentation, and good morning to everyone. So for the outlook and strategy, firstly, it is essential to remind everyone that the key structural growth drivers for out-of-home media remain strong, both now and for the long term. Our media is, at the moment, prospering with growing audiences, thanks to the increasing economic vitality of cities and the rising mobility globally, whether it is a long-haul transport like air traffic or rail travel, and this includes, obviously, public transportation.

Digitization is not disrupting us. Instead, we are capitalizing on [ its boost ] attention through visual emotion, data and flexibility media buying. Our media remains premium, reaching dynamic and young audiences with strong credentials on audience measurement and quality of ad spaces in our portfolio. In a landscape where advertisers face a growing fragmentation of auctions, as most other traditional media are losing audiences, this gives us a unique advantage.

Programmatic now represents for us a huge market opportunity with a USD 300 billion market for online display programmatic globally, more than 5x the total OOH market at the moment. With automated trading, we can target the long tail of advertisers and increase significantly our addressable revenues pool, creating, obviously, new revenue streams. We are optimally positioned to benefit from this market with our growing programmatic revenue and our ownership of 2 leading platforms: Displayce, a DSP and DMP active in 88 countries; and VIOOH, the most connected SSP of the OH media industry with 52 DSP connected. We are the only OOH with such programmatic assets open to third-party media owners.

Considering recent transactions like the acquisition of Hivestack and Vistar by tech and telecom companies at substantial valuations, we believe our assets' true strategic and financial value is absolutely not crystallized yet in our share price.

In the next slide, we demonstrate our OOH media, driven by the growth factors outlined in Slide 25, is clearly gaining market share in key countries around the globe. Over the past decade, OOH market share increased by around 5 percentage points in the total media mix in Germany, Brazil and Australia, nearing or surpassing 10% of total ad spend investment. Notably, in the first half of this year, it exceeded 10% in Germany for the first time according to data from Nielsen.

Moving now to Slide 28. You will notice on this graph the remarkable growth air traffic has experienced over the years. This trend is expected to continue with passenger numbers projected to rise by 5.8% by 2025 and forecasts suggesting the total exceeding by 22 billion passengers by 2050. We are uniquely positioned to capitalize on this growth by operating advertising concessions in 157 airports globally, including 12 of the top 25 airports in the world.

In the next slide, regarding the main tenders, among the most significant we can name: in Street Furniture, Barcelona; in Transport, Danish Rail, and in the airports of Denver and Washington in the U.S. Almost all tenders now incorporate a significant share of digital.

Jean-François highlighted earlier ESG as a key differentiator for us, aligning with our partners' commitments. For our cities and transport partners, we are innovative with sustainable urban solutions such as introducing plants on our street furniture in Paris since 2024 to support and boost biodiversity in cities. Regarding now our cities and transport partners, we are obviously developing innovative and sustainable solutions mainly related to urban biodiversity and low-emission street furniture. We launched, in 2024, JCDecaux, a pilot to introduce plants on our street furniture in the center of Paris. With 42% of our Scope 3 emissions linked to furniture, prioritizing refurbishment and eco-design is absolutely crucial.

Refurbished furniture significantly reduce carbon emissions by over 70% compared to new infrastructures. To help advertisers, we have developed 360 Footprint innovative program, measuring environmental and socioeconomic impacts of campaigns and providing insights into Scope 3 emissions through a calculator. After successful trials in France, we are now gradually rolling it out globally.

Our climate trajectory, validated by the APTI last year, aims for net-zero carbon by 2050, in addition with interim targets by 2030. In 2024, the group has reduced its greenhouse gas emission, Scope 1, 2 and 3, market-based, by nearly 30% compared in 2024 compared to 2019. To meet our Scope 3 target, public procurement must evolve to prioritize ESG in all tenders and select solutions like furniture refurbishment that are less carbon-intensive than new infrastructure.

Looking now at our competitive landscape on Slide 36. We are the #1 global OOH media company, but the #1 in a fragmented market. Our global reach gives us a real edge when it comes to serving international clients, especially in the luxury, cosmetics, finance, energy and automotive industries. We believe that our competitive position is getting stronger, especially with some difficulties faced by local competitors and Clear Channel pulling out of Europe and Latin America now. We will continue to execute our bolt-on acquisition strategy.

Our key takeaways for today are the following: as you can see, robust revenue growth, driven by digital despite macro uncertainties and comparison base impacts in Q2 and Q3; programmatic continued to significantly gain share in our digital revenue; strong operating leverage, 75% of conversion of revenue into operating margin, plus 200 basis points in operating margin rate; maintaining -- while maintaining strict control over CapEx and selective allocation of our capital.

Moving now to our guidance for Q3 2025. We now expect low-single-digit negative organic growth for Q3, taking into account a 410 basis point negative comparison impact due to the 2024 Paris Olympic Games and the UEFA Euro and no improvement in trading in China at the moment. Compared to 2023, organic revenue growth is expected to be high-single digit.

I thank you for your attention. And Jean-François, David and I are now ready to take your questions.

[Operator Instructions] We will take our first question, and the question comes from the line of Adrien de Saint Hilaire.

So first of all, on organic sales growth, Jean-Charles, you just said up high=single digit versus 2023. I think that's quite a big slowdown versus what you had in quarter 2. So can you explain a bit what's changed? Do you feel that advertisers maybe have turned more cautious recently? Or is it just a matter of timing and we should expect a pickup in Q4?

Secondly, on the margin point and the operating leverage, indeed, super strong in the first half. It's a bit unusual, especially given the relatively softer top line, I suppose. So can you detail a bit what's happening there and the sustainability of that into the second half? Because obviously, it looks like you could exceed your 20% operating margin target already maybe in '25.

And then lastly, on working capital, David, how much of that should reverse into the second half? It seems like there are some elements of phasing in there. So just curious in terms of how much you expect to recover into the second half.

Adrien, I'll take the first question, and David will take the second and the third question. So the slowdown that you mentioned regarding Q2 is mainly driven by the U.K., which, as we mentioned, is our second largest market, which had a high-single-digit decline, impacting the overall growth of the quarter. And also, we had some one-off effects from the sporting events, as we mentioned on the call, UEFA and also the Paris Olympic Games, which will be even stronger in Q3 in terms of very tough comparables. And these are the main reasons. We don't see any slowdown in most markets across the world. David?

Yes. Thank you, Adrien, for the question. I will take the -- I will start with the third one, the working capital. To answer to your question, the majority of these timing differences should neutralize by year-end, and we expect our working capital requirement to normalize with only a slight negative impact, depending on our activity level. For giving you more granularity over -- on this item, over 50% of the impact seen at the end of June was due to account receivable, which represents about EUR 50 million, of which EUR 25 million, as I said, was from a reduced factoring amount expected to be neutral by year-end and the rest from delayed customer collections that were settled at the beginning of July. We will, therefore, be giving a strong focus in H2 on cash collection to prevent such a swing on client collection to happen at year-end.

Regarding the strong operating leverage, this is, as I said during the presentation, is mainly coming from a slight -- lower increase in rents and fees compared to the revenue growth, driven by the contract adjustments, especially in China, which represent about 1/3 of this improvement, and this should obviously impact positively the second half of the year. And regarding the other operating expenses, we have been working hard on optimizing our cost base, which has been flat, as you have seen in the first half of the year. It will continue to be like this in the second part of the year. And on top of that, we will continue to review all our business processes in order to gain [ inefficiency ]. So depending on the top line in the second part of the year, we should benefit from this flat or slightly growing cost base, as it has been seen at the end of June 2025.

Your next question comes from the line of Annick Maas.

My first question is, I see you've suggested that VIOOH is doing EUR 75 million in revenues. Can you give us the impact on the operating profit of VIOOH?

And my second question is on China. So you've suggested that there's no improvement expected. Is that maybe because -- and this is a question, I don't know -- whether if luxury is more exposed -- or luxury clients are more exposed to China or why is China remaining so weak?

And then the last one is a bit more a longer-term one, I guess. You've suggested that now 40% of your revenues are coming from digital. Can you tell us how much of your inventory is digitized now? And how you think about the inventory -- the share of inventory digitization 5 years down the line?

Okay. Thank you, Annick. David will take the first question, Jean-Charles, the second, and I will take the third question.

Thank you, Annick, for your question on VIOOH. As I said during our last call in March for the full year financial result, VIOOH should be, on a stand-alone basis, breakeven, slightly positive in 2025. This is on a stand-alone basis. When you look at it on a contributive basis at JCDecaux level, given the fact that it is -- the revenue generating on a programmatic basis, is mainly incremental. The contribution of VIOOH is already positive on a consolidated basis.

Regarding China and your questions, Annick, the luxury is certainly not helping. But overall, the situation is still basically very soft in China. That's basically something that, obviously, we are not absolutely surprised by the fact that the improvement in the marketplace is certainly on a soft mode at the moment. That's the reason why we actively worked on our portfolio about 2 years ago already. And this is starting to pay off, as you can see in, as we said this morning, in our numbers. But the top line at the moment is -- as we highlighted in our press release, as usual, transparency is certainly difficult, continues to be difficult. And I would say that the luxury is still investing in our portfolio. If we want to see something positive out of the situation today is that our business in China will generate profit, one. Two, our business in China is on a low base on a historical basis. And the day it rebounds, and it will, that will be, obviously, given the structure of our contracts, certainly helping to grow again with a good profitability. And third, if we look at the digitization in China, which is increasing, as you can see on our presentation this morning, coming from a low base, 27%, versus big countries around the world now at 32% in H1, the digital is growing double digit. So the transformation of our portfolio, especially in the metro, is certainly going into the right direction, but on a soft environment, because consumption in China, as you know, continues to be under pressure. The overall Chinese economy, as you can see through the official figures, is not doing so bad, but it's mainly led by export, where the consumption is not basically at the moment recovering. So it's still a slow mode. Record high historically in terms of selling rates from the consumers at roughly 20%. So you see that people are saving and not consuming at the moment. So that's the reason why the environment is soft. But we are prepared and geared to continue to grow with profitability despite the low -- the soft advertising environment in China.

On your third question regarding digital Annick, the 40% share of our digital revenue is coming from less than 10% of our inventory. Regarding the long-term prospect of digital versus paper, if I take, as an example, our most digitized market, the U.K., going all through the segments, Billboard now in the U.K., we used to have 10,000 paper billboards. We now have in total less than 1,000 billboards, 1/3 of which are digital. And 1/3 of our digital billboard inventory in the U.K. generates 90% of revenues. So it's quite clear that paper billboards in the U.K. will disappear over the next 5 years. If I take the rail, some of our London railway stations are already 100% digital. So rail will also become 100% digital. In the airports, it's pretty much the same. So the only exception is Street Furniture, where Street Furniture has -- is showing some very good resilience for paper revenues, which continue to be very popular with advertisers. If you look at the yield on paper over the last 10 years, in most of our European Street Furniture markets like Germany, the U.K. and Netherlands, the yield is flat despite the fact that we converted the best locations to digital. So that's, I think, a good example of what will happen long term. So transport environment is becoming more and more digital. Right now, our Transport business is 45% digital. So that will continue to increase. And the fact that we are converting in China, as mentioned by Jean-Charles on your second question, a lot of sites to digital, is going to accelerate the -- our digital penetration in transport. Billboard -- in the markets where it is feasible, Billboard will become more and more digital. Of course, there will be exceptions like the big canvas, the big wrap on buildings during building constructions, which are very popular and which are selling very well despite them being nondigital. And on Street Furniture, it's important to -- again, to repeat that the paper Street Furniture business is quite resilient, which is good news, given that we have a very strong exposure to Street Furniture, especially in Europe.

Can I ask one follow-up? So what happens with [indiscernible]. You had -- so basically, if you had 10,000 paper billboards before in the U.K. and now less than 1,000, you had the locations before secured. So what happens to those locations? Are they freed up and there's no billboard? Or are competitors taking...

No, there are no billboards because the demand is not there. So no one, with maybe a few exceptions, rebuilt billboards on those locations, which we decided to kill.

Your next question comes from the line of James Tate.

It's James Tate from Goldman Sachs. I just had a couple of questions, please. I guess, firstly, you helped outline the impact of revenues from sporting events last year in Q3. But could you help comment on the drop-through to EBITDA from these revenues? Was there any meaningful boost to EBITDA margins in H2 last year that we should be aware of?

And secondly, looking at gross CapEx, I think that decreased to around 7% of revenues in H1, below your full year guidance of around 8%. And I know H2 tends to be seasonally higher, but could you maintain CapEx at these levels?

And a bit as a follow-up to the last question and thinking bigger picture, could you just talk about how you think about striking the right balance to ensure you're investing sufficiently behind the growth in digital?

Sorry, but the line is not very clear. I'm not sure if -- are you speaking -- talking from an iPhone on the train or -- because we can't understand your question.

No worries. Let me try again. Is that better?

Yes, that's slightly better, yes.

Okay. So just the first question was on the impact. You've outlined the impact to revenues from the sporting events last year, but could you comment on the drop-through to EBITDA from these revenues? Was there any meaningful boost to EBITDA margins in H2 last year that we should be aware of?

And secondly, I think gross CapEx decreased to around 7% of revenues in H1, which is below your full year guidance of around 8%. And I know H2 tends to be seasonally higher, but could you maintain CapEx at these levels?

And bigger picture, a bit of a follow-up to last question as well. Could you just talk about how you think about striking the right balance to ensure you're investing sufficiently behind the growth in digital?

I'll take the first question. David will take the CapEx question. Jean-Charles will take the last one regarding striking the right balance between paper and digital. So the impact of the -- both the Euro 2024 in Germany, as well as the Paris Olympics on EBITDA, if I understand your question correctly, if I look at the French numbers, France did a very good -- did well in the first half and EBITDA-wise as well. So the cost control that was mentioned by David took place across the group. And the revenue -- lower growth in France, for instance, despite the fact that France was growing, was offset by good cost control, meaning that we had a good EBITDA number in France. And that's my answer to the first question. David, on CapEx?

Yes. On CapEx, as [ Jean-Charles ] has indicated in our call in March, we are still aiming for 2025 CapEx level around 8% of the revenue. Right now, it is true that we are at 6.4% of the revenue. So it is clearly possible that we will end up below that target, but we will have a clearer picture at the start of Q4, depending on the project on which we are working on.

On the right balance digital, we are – obviously, every project and every transformation in our existing footprint, we are maximizing as much as we can the digitization process. This is, I think, shown in our numbers, as it was replied before by Jean-François on the previous question. So you can be sure that everything that can be rationally digitalized under our, I will say, way of doing it, [ EA ] premium, high-quality products and best digital screens on our portfolio. And that's, I think, one of the reasons why with basically roughly 5% of our portfolio, we already generate 40% in digital is because it's highly qualitative. And this is true across our different geographies around the world or different segments. You will remember that a few years ago, Street Furniture was lagging. And some of our -- some investors were saying why Street Furniture is lagging? It's because the technology, the digital -- the technology was not yet there at the moment -- at that moment. And now, Street Furniture has been the fastest-growing basically digital segment within our portfolio, not only the biggest but also the fastest-growing segment. And it's because now, the technology is there. And we have a new revolution in Street Furniture that is coming on is that the LED is now becoming very competitive in terms of quality, resolution, pricing and duration, which certainly will give a boost to our portfolio evolution on digital. So the balance is, I would say, favoring digital without any doubt and across many geographies at the moment and across the 3 segments now that are absolutely boosted by digital.

Your next question comes from the line of Julien Roch.

[Foreign Language] My first question is, any contracts you lost in the first half?

The second for David, rent and fees were up EUR 10 million in the first half. What was the base in an absolute level in million euros?

And then, the third question on China. You highlighted that digital was up quite nicely in China, so all of the decline is due to paper. And if I look at Page 12, your digitalization went from 27% to 32%. So how fast can you digitalize China? Are we talking about 5 points a year, which means that it's going to take you 10 years to go to 70%, 80% because China is the most digital market in the world, right? North of 90% of advertising is digital. So kind of the path to digitalization in China. That's it.

Thank you, Julien, for your questions. I will take the usual -- your usual contract loss question. David will take the rant and fees. And Jean-Charles will address your -- the digital penetration of our company in the Chinese market.

So regarding contract losses, only one major contract loss in a small market being Ireland, where we lost the NTA contract for bus shelters across Ireland to Clear Channel before they were sold to Bauer Media. So that's the only one which is impacting our Irish business, where we used to be the #1 company in Ireland. And now, we are the #2 company in Ireland in terms of our share of out-of-home media revenues, this contract being the game changer for being #1 and #2. But we have a very healthy business in Ireland. We still have some very good presence in Dublin with our freestanding units, which are mostly digital, subsidizing the bike -- the free bike sharing scheme, which is very popular among Dublin people, tourists and residents.

Julien, regarding your question on rents and fees, in absolute terms and not in terms of evolution, it represents about 49% of the total revenue, rents and fees, including the local property tax and cost of goods sold [ in '25 ] and was representing about 50% at the end of June 2024.

Julien, on the Chinese questions, you're right to say that China is the most digitalized country. In our portfolio of assets, you're right to say also that the rebound on our profitability is coming mainly from the renegotiation of our existing contracts and the digitization that is coming now through that basically period of renewal and renegotiation. So we are basically quite bullish on our digitization in China, but we are also, as you know, working with our partners. And so, it is clear that the airport digitalization penetration is growing very fast, where the metro is taking a bit more time. But as soon as the market will rebound, I think we will see an acceleration in our digitization in China. Now, we are digitalizing, but we are also cautiously doing it with our partners. But things are progressing quite well in this. And the rate of penetration in China will continue to grow in the near future, alongside our digitalization. It's a process to digitalize in every country. And obviously, it is a process to also digitalize in China with our partners. But the situation -- the difficult situation on the overall marketplace is helping us to make them realize that digitalization is a must-do strategy, where in the past, it was not exactly the case. So now, I think, as usual, difficult times help people to realize that things have to change, and that will certainly help us to grow faster in the future. But it's a process that takes a bit of time.

The next question comes from the line of Adam Berlin.

Two questions, please. First question, you have said that Q3 will be up high-single digits versus 2023. Is that a reasonable assumption for Q4 as well? Or anything we should be aware of that could make that different? That's the first question.

And the second question is, can you tell us what the net impact is on 2026 from the contracts you've won and lost this year so far?

So, on your first question, up single digit in Q3 versus 2023 and what we expect in Q4, what I can tell you is our pacing figures in Q4, which are not impacted by the one-off effects of the Olympic Games and/or the Euro 2024, are quite good. It's obviously very early to make a final call, and we will guide, when we announce our Q3 numbers later this year, on Q4, which is our biggest quarter. We generate more than 60% of our operating margin in the second half each year. And a major -- a significant part of this operating margin is coming from Q4, which, again, right now, across the globe, is pacing quite nicely. On the net impact, David?

Yes. The lost contract in 2025, as mentioned by Jean-François, had no significant impact, were not very meaningful. It was -- weather a loss-making contract or dilutive contract on our operating margin. In terms of top line, it was representing less than EUR 20 million on a yearly basis. So we do not expect a significant impact in 2026 on the top line and should be quite positive on the bottom line.

And we maintain our targets for 2026 to be above 20% operating margin rate and a free cash flow of EUR 300 million. Those targets are maintained.

Sorry, can I just follow up? You talked about the impact of the loss, but you've also won contracts this year. So is there any -- can you help quantify the size of the wins as well?

A sizable one was the Stockholm win for both the bus shelters, as well as the underground. The contract has not been signed yet because Clear Channel appealed to the court trying to force the SL, the transport company, to retender. They lost in the first instance. They lost in the second instance. And we heard last week that they are taking SL -- they are taking the case to the Supreme Court, which is very typical of Clear Channel pre sale of their business to Bauer. So well, we'll see. Obviously, this contract was meant to start on the 1st of January 2026, both for the bus shelter contract, as well as for the major subway stations in Stockholm. It's now going to be a bit delayed. By how much, we don't know. It depends on the -- also on how fast the -- how quickly the Supreme Court can make a decision. But the contract has not been signed yet, and it should have been signed. So that's what I can tell you about a major one. Obviously, we expect tender results, as shown in the slide on tenders, which obviously, some of them are important tenders, which is the nature of our business. We win most. We have a success rate in Street Furniture above 80%. So we'll -- obviously, we don't know the outcome of those tenders yet.

Barcelona is an important one in Spain for us. You will remember that the Spanish antitrust authority kind of blocked the transaction, which was done between Clear Channel and us to buy their Spanish business. They wanted us to divest too many assets. So in the end, we decided to pull out of the deal. So Barcelona is an important one for the Spanish business. Danish Rail in Denmark is an important one for the Danish business. Washington -- Denver Airport -- Denver is the #6 airport in the world. Although it's very domestic, nevertheless, it's by ranking, in terms of passenger numbers, #6 in the world. So there are some significant tenders on the list, and we'll see what we can win. And we are not the incumbent -- we are the incumbent in Denmark. But we are not the incumbent in Barcelona. We are not the incumbent in Washington and Denver, just to name a few big ones. And so, we have potentially some potential good news if we win them on good terms and conditions.

We will take our next question, and the question comes from the line of Davide Amorim.

[Foreign Language] Just 3 on my hand, please. First, when I look at your Q2 organic growth, Street Furniture is clearly driving the group performance. Why is there such a difference between Street Furniture compared to Billboard and Transport?

The second one on M&A. Could you please give us a bit more detail on your current pipeline? Are conditions favorable for doing M&A at the moment? And which region are you most interested in?

And the third one, it seems that the digital growth is slightly normalizing. What are your growth expectations for this segment going forward? And do you still expect double-digit percentage pace beyond 2025?

Okay. Thank you for your questions. I will take the first one, Jean-Charles, the second, and then, I will take the third one.

So on Q2, Street Furniture leading the pack in terms of organic growth, you're right. Billboard, in terms of digital billboards, is mainly U.K., Latin America and Australia. And it's fair to say that the U.K. had a very tough second quarter, which, as I mentioned earlier, we were down high-single digit and more in billboards. We slightly outperformed the market, which was down by more than that. And it was due to the fact that, first of all, we had a tough comp, a very tough comparable in the U.K. We were up 30% last year organically in the first half. So that's mainly due to the U.K. Australia as well. Billboard -- digital billboard in Australia in the second quarter was lower than in the first quarter. And so, that's the main reason on the lower performance of our Billboard segment, and also the paper billboards, which in some markets where we are not able to digitize, are a bit under pressure.

M&A, no change in our strategy: bolt-on acquisitions, when it makes sense, to reinforce our position, if not focus on organic growth. Region where we want to be basically opportunistic on M&A, depending on -- obviously, the target is always Europe, where we continue to monitor the situation and the consolidation in some key markets. Obviously, we are looking at some opportunities that may happen in -- still in Latin America and Asia-Pacific, where you could have some situation, interesting situation. So our platform is, as we've highlighted, again, it's unique around the world today in terms of quality of infrastructure, in terms of density in top hubs around the world, whether it is cities or a metro system or basically airports. So we really complement our strategy with bolt-on acquisitions when it makes really sense, as we did over the last 5 or 10 years in Latin America. And we can see now that this is a region that has been growing a lot. We did it also basically in Australia, where we had the opportunity in 2018 to consolidate one of the key players in Australia and New Zealand. And we have now a strong platform in Asia-Pac. So Asia-Pac, Latin America is certainly the region where we have most opportunities in terms of bolt-on, but nothing big to be expected at the moment in the environment.

On your third question regarding the future growth of digital out-of-home, first of all, the forecast from the main advertising agencies is that digital out-of-home should remain the fastest-growing segment in the media business overall, ahead of online, obviously, being a much smaller segment. That's quite obvious, but still double digit over the next couple of years. JCDecaux delivered, over the last 10 years, roughly 16-plus-percent compound growth rate year-on-year, driven by the digitization of our portfolio in many markets.

Whether we can continue this trend of around strong double digit will also depend whether or not we can digitize the French market, which today, for legal and political reasons, is a very difficult one. Remember, France is, in terms of digital penetration, less than 10% versus 40% for the group as a whole. And France is 18% of our business. It is the largest market. So regarding Paris, where we cannot digitize, this will depend on the outcome of the municipal election next year because some political parties are in favor of digital. The current coalition didn't want to digitize or didn't want to change the advertising policy in Paris to paving the way for us to be able to digitize. So therefore, we are going -- we are monitoring the outcome of this election very closely. And in some other cities, some green politicians are not in favor of digitizing or replacing scrolling paper by digital, which, in our opinion, doesn't make a lot of sense, but it is what it is. So that's obviously not helping us to boost the digital revenue when your largest market is underpenetrated for these reasons.

Having said that, we still have a lot of markets around the world, including obviously China, where we are still at 30% digital in a market which is -- I just want to remind the people on this call that China is the second largest advertising market in the world, but 90% of the advertising market is digital, and we are only 30%. So as indicated by Jean-Charles, obviously, we are going to accelerate the digitization of our Chinese portfolio. So, that would help because China is the third largest market with 10% of revenues. So digital should continue to grow double digit if you take all this into consideration. And if -- in the event that we can digitize France, which is a question of time, there is no doubt in my mind that France will become digital on one day, then all of a sudden, this will be a big boost, given the size of France in our overall portfolio.

And just a follow-up question. Your operating margin performance in H1 is quite impressive for the moment. What is the trend for H2? Is it possible to reach your full year 2026 guidance on operating margin already in 2025?

David?

Thank you, Davide, for your question. As you know, we don't give a guidance for the second part of the year on the operating margin. We are on track, as indicated, to deliver our target with operating margin ratio overall above 20%, and that's all what I can say.

We will take our next question, and the question comes from the line of Jérôme Bodin.

Three questions on China. So, on China contract renegotiation, so assuming that the framework is 100, where do you see yourself at the moment in terms of renegotiation finished? Is it 40, 50, 80 or 100? That's my first question.

Second one, still on China. So assuming in the midterm that China is back to 2019 regarding the renegotiation of the contract, should we expect the margin being lower? Just to understand the new math for China.

And lastly, on the trend in China, short-term trend, so decline. Do you see this current situation as cyclical? Or do you see maybe a lower demand for certain media, including outdoor? Because if we see -- if we look to the numbers of other players like Tencent, they are growing relatively nicely in Q1 and Q2. So my question behind is, if it is the case, if it is structural, what is your answer? So is it to continue to accelerate the digitalization or maybe to partner with someone or reinvent the offer in this very specific and fast-changing market? Just a very open question on China.

Thank you, Jérôme, on your Chinese mood this morning. And so, very clear answers on your 3 questions. The first one on the level of basically the state of the nation on the renegotiation in China. Taking into account your 100% -- your 100 base, I will say that we are now at certainly 75% to 80% of what was the reassessment of our, let's say, financial duration conditions. And I think pretty successful because everything we wanted to achieve, we almost achieved it in good spirit and partnership with our Chinese partners that have been very comprehensive and loyal to JCDecaux, being a very, I will say, trustworthy partner in China. I think this is something that you should, on this call, acknowledge is that the Chinese situation is difficult for every industry at the moment -- or most industries, let's say, or most businesses. But the Chinese partners for JCDecaux have been very loyal to us and very comprehensive. So that's number one. So I will say more than 2/3 has been done.

It is clear that if we come back to the 2019 numbers, our margin in China will be coming back strongly because we -- the structure of our Chinese deals are, basically most of the time, minimum guarantee, no revenue share. So basically, it is obviously something that will -- if the business is going upwards, most, not to say the least, almost all of it will come down to the margin. So, on your second question, it is clear that if the business rebounds, I should -- you should remember that in 2021, the business was doing very well. Then you had the second COVID situation. And since then, the business has been tough in China.

So it also links to your third question, is it cyclical or structural? I don't -- we don't think that is structural if we digitalize. So we have to digitize, as we said before. And so, I think the decline is certainly more pronounced at the moment because of the situation of the consumption. But the digitalization is certainly helping us in some categories in China. So we strongly believe that our reassessment of the contract base plus our digitization acceleration, as we said -- you remember that when we renewed the contracts, even during COVID, we always said basically, we are lagging a bit because we were in the renegotiation process and the retendering process, and that's where we are. So I think it's clearly going into the right direction, except the fact that at the moment, Q2 has been a bit tougher than expected. Q3, we continue to be in line with. And there is a third factor that you should take into account is that Hong Kong at the moment, where we have a strong presence, and to a lesser extent, Macau, but mostly Hong Kong is under pressure. So Hong Kong as a city, as a worldwide city is certainly under pressure. So this is not helping. If you look at the Chinese context, the Hong Kong situation is not helping. So overall, contract base, very healthy, long duration, very loyal partners, soft advertising market in the industry at the moment, but less in the digital environment. So we are working hard with our teams to make sure that we are fully prepared for the rebound. And we think that at some point, the business will get better without any doubt. And I think the work we've done on the reset strategy has been quite successful so far.

We will take our next question, and the question comes from the line of Conor O'Shea.

Three remaining questions from my side. First question, just on the U.K. business. I think Jean-François, you mentioned 30% comp in the first half. Just wondering, can you remind us what the comp is in the second half and whether you see, in your guidance for the Q3, any easing of the situation in the U.K.? I think ITV suggested that the market was a bit better going into the second half, at least for Q3.

Second question, just in terms of spend by the -- your biggest client sector, fashion and luxury, as you mentioned, minus 2% for the first half. Just wondering, was that materially worse in the second quarter versus the first quarter? And how is that sort of shaping up into Q3? Is that a big factor behind the slowdown?

And then, the third question, maybe for David. Obviously, some currency translation drag in the second quarter. Just wondering what kind of range you expect at the current exchange rate in the second half for currency translation drag.

Thank you, Conor. I will take the first question, and [ Jean-Charles on ] luxury spend being down by minus 2%, and David, the third one.

So on the U.K., as you implied in your question, we had a very strong growth last year, nearly 30% in H1. So a very, very tough comp. The first quarter was pretty good. Second quarter was totally the reverse, a high-single-digit decline across all segments. Our salespeople are more optimistic about Q3 and Q4, but it's a bit early to call. It's very clear that this -- our performance in the U.K. was affected by the weak consumer demand. Having said that, TV was under pressure in the first half more than we were. You shouldn't underestimate the deals between agencies and TV media companies, which are based upon volume rebates, meaning that in order for the agencies to get their volume rebates, they have to reach a certain level of spend with the TV groups. So that can swing some of the growth, especially in the second half, which is why the TV companies are telling you that it's a bit better because they know that agencies, when they see that they are not going to reach the minimum threshold of spend, all of a sudden, they boost their TV spend. That's the real world. And when they boost the TV spend in order to get their volume rebates, this is obviously affecting other media, including out-of-home. So we don't have that much visibility in the second half. But I think that's the main reason why the TV companies can be more optimistic about the second half in the U.K. So that's my answer to your question.

And Jean-Charles, on the spend?

Yes. On the spend on the luxury, I mean, as you can see, Conor, the luxury groups have been increasing their overall spend with us over the last decade quite significantly, and they became the largest contributor on our portfolio over the globe, and that's due to the platform that we were referring to in the presentation this morning, premium digitalized and unique geographically, especially in the top markets around the globe and in the top DMAs in the top cities. And so, the fact that the luxury brands now are basically under a bit of pressure because of the situation overall, especially in China, it's clearly putting a bit of pressure on our top line numbers with them. Nothing, I will say, at the moment, really changing the way they look at our media, but it is clearly a tough comp.

And if you take into account last year that for the Olympic Games, obviously, we had a lot of -- we had a boost on overall spend, but also on the luxury brands, most of them being French or Italian and the Olympic Games taking place in Paris last year. It's clear that in Q2 and Q3, we had a bit of headwind on the luxury brands plus the current context, which is certainly not helping.

So -- but overall, we see still a very good traction, especially in the cosmetic overall, which is doing well. So that's where we are at the moment. And we see also brands now looking at the situation to try to avoid basically big budget reduction. So a bit of kind of -- we hope also that they are looking at companies like L'Oreal that L'Oreal basically are keeping always the spend to basically -- and you can see that across the different crisis sometimes, and they are gaining share big time when that happens.

So -- and you can see their numbers across the years, it's quite impressive to see given their size, how much they protect their marketing activation and marketing costs. So this is something that most of the luxury brands now are looking very carefully to make sure they are crossing, let's say, sometimes the difficult moments by keeping also the investment for their brands, which is their main assets at the end of the day.

And if you look -- and I won't name them, but some of the group that are in tough difficulties at the moment, they are the least basically -- they are not the biggest investor. So they are not the biggest advertising. When you look at their P&L, they invest less than other brands. So I mean, it's quite interesting to see the correlation between the brand development and the advertising investment into their P&L.

So that's what we can say about the luxury brands at the moment, but it is clear to say that the situation overall, not only in China, but also in the U.S. and in Europe is certainly something that we have to carefully monitor for the second part of the year because for us, Q4 is also an important quarter, not only the biggest, but also the quarter where the luxury brands are investing the most.

Yes, the last question regarding the currency evolution for the second half of the year. It is a good question. As you know, it is not easy to predict. In the first half of the year, we had a slight negative impact from FX evolution, which was compensated by the positive impact from the change in scope.

As you know as well, our business is mainly dominated in local currency. So we have a kind of natural hedging on our bottom line related to the evolution of currency. So in the second half of the year, we take into account as an assumption about the same evolution as the one we have in the first half with no significant impact on the top line and on the bottom line, partially compensated by the change in scope as well.

Coming back to your first question, Conor, Remi just told me that I didn't quite fully reply to your question regarding the comparable in the second half for the U.K. So we will have an easier comp this year in the second half because last year, the second half in the U.K. grew 10% versus 30% in the first half.

We will take our final question. And your final question comes from the line of Anna Patrice.

And I think it was quite a good set of results. Some follow-up questions from my side. First of all, if we go back again to the profitability, you had 200 basis points improvement in H1, even though the growth has slowed down. Should we expect the same improvement or similar improvement in H2?

And what do you think should be then the long-term margins? Here, the question is because obviously, you have upside from digitalization. So if you can comment on margin difference between the digital and non-digital business. There should be upside because of the better competitive environment as Clear Channel has left, mostly left European market. So how do you see the trend overall in your profitability?

Another question is on the CapEx because CapEx has slowed down. And again, in the past, it was sometimes up to 10% of group sales. Now it's roughly around 8% of group sales. But impression is that you still need to digitalize, you still need to invest. So what should we think about the CapEx going forward, please? Thank you.

David will take both questions on margin improvement in the second half, whether this can be sustained and the second on CapEx.

So I will start with the first -- with the second one on CapEx. Yes, it is true that in the past, on an average basis, we were -- if you look at the 10-year average ratio on CapEx to sales, we were about 8% with some peak at 10%. As we said at the beginning of the year during our call for the full year result, we target to work with an envelope of CapEx of 8% of the revenue, including digital.

As you have seen at the end of June for the first half, we are at 6.4%. So we are below this target. We are still working to deliver a ratio around 8% for 2025. And the digital CapEx, we have always been very selective in the way we are digitizing our premium location. Digital CapEx represents about 40%, a bit more than 40% of the total CapEx at the end of June, and we will continue to work with this amount of CapEx or this portion of digital CapEx within our total CapEx between 40% to 50% and keeping and maintaining our total CapEx around 8%.

Coming to your question on the evolution of the margin, as we indicated to an answer to one of the questions that we had, the major part of our operating margin is delivered in the second half of the year, a bit more than 60%. So what we have experienced on the first half should continue in the second half. So I will let you do the math. And we should continue to benefit from our efficient cost management in the second part of the year based on the revenue growth that we will be able to deliver.

Okay. And overall, where do you see your margins in the mid, long term because there is upside from digital? And if you can comment on the difference between the digital and analog margins, please? And also because of Clear Channel has left Europe?

Yes, this part of the question that I missed, sorry for that. You know, the main upside that we get from digital on the margin are currently coming from the top line. As you know, we are a fixed cost business model because more than 70% of our OpEx base is fixed. And thanks to the flexibility that we get from the digital, we can get the upside on the top line and mainly on the business segment where the rents are fixed, which is Street Furniture and Billboard business segment. And this is what you can see through the evolution of our operating margin on the Billboard business segment, where we are able to turn around the business when we are in a capacity to digitize our inventory, what we did, for example, in the U.K. or in Australia, where 10 years ago, we decided to completely converted our inventory -- billboard inventory in the U.K. to more digitized on the premium location.

We went from 7,000 or 8,000 billboards to 1,000 and out of the 1,000, more than 20% are digitized. It was a business which was breakeven loss-making 10 years ago, and it is now a business at 20% operating margin. So this is the benefit that we will get from the digital. So I hope this will answer to your question.

And regarding the competitive landscape, we can only hope that Bauer Media being a family-owned business, which acquired for $600-plus million, the business of Clear Channel in Northern Europe will be more rational in terms of their bidding strategy and less legalistic.

I mentioned on this call, replying to one of your colleagues about the court cases in Stockholm, 3 court cases going on right now. I could have mentioned as well Peterborough, where Clear Channel went to court twice for a relatively small city. We ended up winning, but they forced the city to retender twice in Peterborough for very, very minor reasons, which are completely irrelevant. But that was their style.

I just want to remind you that Clear Channel sold their French business for EUR 1 and gave EUR 45 million to the buyer, a small private equity company in France to take their French business, which is still the second, third largest out-of-home media company in France, generating about EUR 250 million of sales. So it tells you the huge value destruction triggered by Clear Channel since they came into the European out-of-home media market in '98. So we hope that Bauer Media will be more rational.

What I can tell you is that in the countries where Clear Channel was not operating out-of-home media, where we are facing other competitors, our margins are higher. So we clearly see that the Clear Channel impact on margins in the countries where we are competing head-to-head against them was pretty negative.

And if I may, just 2 follow-up questions from my side. First, on net income in 2024 because you include the APG gain. So if we adjust for the APG gain, I just don't know if it's tax deductible or not, et cetera, what would be the net income in H1 and full year 2024?

And the second question, impression is that some investors are worried about your contracts with municipalities that maybe municipalities have pricing power and if the margins are going down or not in this segment. So if you can comment on your contracts with municipalities. And again, if there is utilization and if this does improve your margins or should improve your margins over the long term?

On the impact of APG.

The impact on APG was EUR 45 million in H1 on the EBIT and as well on the net profit. And as we said when we announced our full year 2024 financial result, as far as I remember, our net profit would have been excluding the APG, and you can find the information on the presentation at about EUR 210 million.

And currently, as you have seen in our presentation, excluding nonrecurring items or excluding APG from 2024 financial result, the net income group share would have been growing at 71% year-on-year. It would have been -- it is 86.1% if you exclude not only APG, but other nonrecurring items as it is indicated on the presentation.

And regarding the second part of your question -- your second question on municipalities becoming more difficult. It's the nature of our business is to compete for these public contracts, and it's not driven by the fact that the municipalities are becoming smarter. It's all about the willingness of some competitors, well, I mentioned Clear Channel, which was keen to gain market share at any cost.

And obviously, some other competitors are more -- much more rational, and they are more interested in making profitable bids. So that's why the exit of Clear Channel could be good news, but we'll see.

And sorry, and the impact of the increasing share of digital contracts or digital sales with municipalities, does it impact the profitability or it has no impact on profitability?

No. I mean, David, reply to your question, giving you the example of the U.K. business, where the digitization of the Billboard business paved the way for us to have a Billboard business now in the U.K., which is about 20% operating margin rate. So it's clearly that digital can improve the profitability.

Checking if it's also the case with municipalities.

This concludes the question-and-answer session. I will now hand back to the room for closing remarks.

Thank you, everybody, for attending this conference call this morning about the H1 2025 results. And on behalf of our Executive Board, we wish you all a very nice holiday break.

This concludes today's conference call. Thank you for participating. You may now disconnect.